We conducted a multicenter randomized double blinded controlled trial comparing early postnatal dexamethasone to selective late dexamethasone therapy in premature infants at 42 centers in the Vermont Oxford Network. Methods: Infants weighing 501-1000 grams were eligible for enrollment at 12 hours of age if they required assisted ventilation, had received surfactant replacement therapy, were physiologically stable, had no obvious life-threatening congenital anomaly, had blood cultures obtained and antibiotic therapy initiated. Infants were randomly assigned to early dexamethasone therapy or saline placebo. Intravenous Dexamethasone was administered for 12 days according to the following dosing schedule: 0.5 mg/kg/day for three days, 0.25 mg/kg/day for three days, 0.10 mg/kg/day for three days, 0.05 mg/kg/day for three days. Infants in either group could receive treatment with late postnatal steroids beginning on day 14 of life if they were on assisted ventilation with supplemental oxygen greater than 30%. The primary outcome measure was chronic lung disease or death at 36 weeks adjusted age. Results: The study was stopped prior to completion of sample size goals due to concern regarding serious side effects in the early steroid treatment group. 542 infants were enrolled (early treatment n=272, selective treatment n=270). The two groups had similar demographic characteristics. No differences were noted in the primary outcome of chronic lung disease or death at 36 weeks adjusted age (early treatment 50% vs. late treatment 53%, relative risk 0.93, 95%CI 0.79, 1.10). Fewer infants who received early steroid therapy received late steroid treatment (relative risk 0.69, 95%CI 0.59, 0.82). Infants who received early steroid treatment had less risk of patent ductus arteriosus (relative risk 0.78, 95%CI 0.63, 0.97) and fewer infants in the early steroid group received indomethacin therapy (relative risk 0.74, 95%CI 0.63, 0.85). However, more infants who received early steroid treatment had complications associated with therapy including an increase in gastrointestinal hemorrhage (relative risk 1.77, 95%CI 1.02, 3.07), an increase in hyperglycemia (relative risk 1.29, 95%CI 1.14, 1.46), and an increase in the use of insulin therapy (relative risk 1.62, 95%CI 1.36, 1.94). A trend toward increased gastrointestinal perforation (relative risk 1.65, 95%CI 0.95, 2.89) and a trend toward increased systolic blood pressure (relative risk 1.35, 95%CI 0.97, 1.86) was noted. In infants receiving cranial ultrasound examinations, an increase in periventricular leukomalacia was noted in the early steroid treatment group (relative risk 2.25, 95%CI 1.00,5.08). Infants who received early steroid therapy had fewer days in supplemental oxygen, but experienced poor weight gain. Conclusion: A 12 day course of early postnatal steroid therapy given to extremely low birth weight infants did not decrease the risk of chronic lung disease or death at 36 weeks adjusted age and was associated with serious complications and poor weight gain.